Giant Sucking Sound: Part II

Friday - June 26, 1998 at 8:44 am

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by Patrick J. Buchanan – June 26, 1998

The title of largest employer in the USA long ago passed to
the McDonald’s and Wal-Marts. GM is now the largest employer –
– in Mexico. And as the United Auto Workers strike spreads from
Flint, Mich., it is easy to see where Motown’s future lies: south
of the border, down Mexico way…

“What’s good for America is good for General Motors, and vice versa,” GM’s “Engine Charlie” Wilson told Congress in 1953. Rewritten by a malevolent press to read, “What’s good for General Motors is good for America!” the line was endlessly quoted as a reflection of corporate America’s arrogance and greed.
But Charlie Wilson had it right. In the 1950s, GM employed more workers, paid the highest wages and the most taxes, and had done more to win World War II than any other company. Chevy, Pontiac, Oldsmobile, Buick and Cadillac churned out the machines of war that polished off Hitler’s Thousand-Year Reich in 40 months.

But what’s good for GM may no longer be good for America.

The title of largest employer in the USA long ago passed to the McDonald’s and Wal-Marts. GM is now the largest employer — in Mexico. And as the United Auto Workers strike spreads from Flint, Mich., it is easy to see where Motown’s future lies: south of the border, down Mexico way.

“Since 1978, General Motors has built more than 50 parts factories in Mexico, which today employ 72,000 workers, making its parts subsidiary, Delphi Automotive Services, Mexico’s largest private employer,” writes Sam Dillon in The New York Times. In Matamoros, “thousands of Mexican workers earn $1 to $2 an hour producing instrument panels and steering wheels for GM cars and trucks.” The U.S. minimum wage — $40 a day. The move to Mexico has become a target of UAW charges that GM is “putting America last.”

In Juarez alone, there are 18 Delphi plants. Across from Juarez, in El Paso, Texas, the Times’ Sam Howe Verhovek writes, “Four years after (the North American Free Trade Agreement) lowered trade barriers, the cities along Texas’ long border with Mexico that had hoped to benefit are struggling to become more than glorified truck stops as they watch their manufacturing jobs go south by the thousands.” Unemployment in the border towns is higher than in Juarez and two to three times the U.S. average.

Not only GM is making its new Motown in Mexico. Ford has 11 plants there. Chrysler’s new partner Mercedes will follow suit. Rival Volkswagen has already shuttered its U.S. plant in Pennsylvania and moved production of its new Beetle into Mexico.

“Mexico is rapidly becoming the hottest destination for auto production,” writes Joel Millman of The Wall Street Journal. “It is next door to the world’s largest auto market. It offers wages that make line workers cringe from Detroit to Stuttgart … and it is home to a growing legion of parts suppliers.”

Eight billion U.S. dollars have been invested in auto factories and plants in Mexico since NAFTA; another $8 billion is expected by 2000. Auto and truck exports from Mexico to the United States hit 800,000 vehicles in 1997. They are expected to exceed 1 million this year.

Volkswagen alone will produce 450,000 vehicles in Mexico in 1998, and Japan, too, is siting new factories there. The attraction — proximity to the world’s greatest auto market and an open border, thanks to NAFTA. And oh, yes, wages at the Volkswagen plant in Puebla average $13.50 a day. That’s $1.69 an hour or about one-third of the U.S. minimum wage.

To economists who babble on about the “worldwide division of labor,” this is all wonderful. After all, “the consumer benefits,” they say.

But to an American who looks on GM, Ford and Chrysler as priceless national assets, it is disturbing. For what is happening is clear. All manufacturing that requires large pools of labor is going to leave America. U.S. workers cannot compete with Mexicans who earn $1, $2 or $3 an hour. No U.S. worker can live on those wages. An American employer who tried to pay him that would be indicted for violating federal and state minimum-wage laws.

Through NAFTA, we have guaranteed an endless hemorrhaging of our manufacturing base out of the United States. As for the lower-paying service jobs we have kept, we have — with an immigration policy that brings in a million new people a year — guaranteed an endless downward pressure on the wages of our native born.

Not to worry, we are told. Americans will keep the high-tech jobs in Silicon Valley. But Bill Clinton and Congress are trying to expand — from 65,000 to 115,000 a year — the annual influx of high-tech immigrants from India and China. Apparently, not enough Americans in this First World nation of 265 million are qualified.

Isn’t that what they used to say about black folks?

Query: When did we vote to ship the Arsenal of Democracy abroad and to replace our domestic labor force with a foreign one?